Medtech M&A report: Quality beats quantity in 2012, with more activity ahead

up and down illustration

The medical device sector posted some strong merger & acquisition figures in 2012, and the year ahead is looking bright as well, according to a report from analysts at PricewaterhouseCoopers.

Although deal quantity dropped slightly year-over-year, the value of the medtech M&A market gained significantly, driven primarily by the $21.3 billion Johnson & Johnson (NYSE:JNJ) buyout of Synthes, which closed in July 2012.

The total number of deals dropped from 52 in 2011 to 50 in 2012, but deal value increased from $24.6 billion to $36.4 billion, according to the report. With healthcare reforms causing industry-wide shifts in strategy, analysts expect M&A activity to increase further in 2013.

"Despite a slowdown during the fourth quarter, the medical device segment saw the greatest gains during 2012 in terms of deal value," the analysts reported. "In the medical device sector, as companies have sought to unlock the value of non-core businesses and assets, others have sought to achieve growth by entering new markets and diversifying their product offerings."

Last year was a tough one for the lifesciences sector and deals withered slightly from Q3 to Q4 amid concerns in the U.S. and abroad.

"Domestically, uncertainty related to the presidential election and the potential impact of the “fiscal cliff” hindered transactions during 2012," according to the report. "Globally, the Eurozone debt crisis, a stalled global economic recovery, persistent weakness in the labor markets, disappointing economic growth in the BRIC nations (Brazil, Russia, India, and China) during the first half of 2012, and ongoing instability in the Middle East cooled M&A activity."

Nevertheless, things are looking good for 2013 and PwC analysts predicted an uptick in deals.

"With the implementation of the Patient Protection & Affordable Care Act in the United States and its sweeping reforms reshaping business models, we expect M&A activity to increase across segments in 2013," they noted.

One place to look for such activity may be in the so-called "frontier market" countries: Mexico, Turkey, Indonesia, and African countries.

PwC analysts expect that more buyers will turn to the frontier market as assets become scarce in the ever-popular BRIC nations: Brazil, Russia, India, and China.

RSS From Medical Design & Outsourcing

  • 3-phase current transducer from PEM delivers all-in-one convenience
    The new RCTrms 3-ph current transducer from Power Electronic Measurements (PEM) delivers a convenient, safe and accurate solution for measuring current in three phases. It features a thin, clip-around, flexible sensor coil and provides accurate true rms measurement with 4-20 mA or 0-5 V output, enabling simple installation with PLC’s, SCADA systems or automation equipment. […]
  • Safety alert: Recall on two IV solutions from Baxter
    Baxter International announced it is voluntarily recalling two lots of intravenous (IV) solutions to the hospital and user level due to the potential presence of particulate matter. The particulate matter in each case was determined to be an insect and was identified as a result of a customer complaint. The matter was identified prior to […]
  • TSO3 begins shipment of STERIZONE VP4 Sterilizers to U.S.
    TSO3, a developer in sterilization technology for medical devices in healthcare settings, announced that the company has received purchase orders for multiple devices from the U.S. The orders are the result of the collaborative relationship between Getinge Infection Control, its sales and service provider, and TSO3. “Finally,” said R.M. Rumble, president and CEO of TSO3. “Our Vision is […]
  • Turkish medical company is seeking reseller and OEM partners in the U.S.
    UZUMCU Medical Equipment, one of Turkey’s first and largest manufacturers of medical devices, is seeking reseller and OEM partners in the U.S. The company has an array of FDA-certified OR tables, surgical lights, surgical suction units, electro devices and other medical equipment. “We want to bring our experience with distributors throughout Europe and the Middle […]
  • QImaging introduces new CCD cameras for microscopy with modern software to streamline image capture
    QImaging, a manufacturer of scientific cameras for life science and OEM applications, introduces a new series of Retiga CCD cameras, accompanied by QImaging’s new acquisition software to deliver high-performance tools for microscopy and imaging to researchers at an affordable price. The new QImaging Retiga R1, Retiga R3 and Retiga R6 cameras offer valuable technical features […]
  • Sigma-Aldrich announces a new certification to aid IVD customers
    Sigma-Aldrich, a life science and high technology company, announced the company has received ISO 13485 certification for expanded quality assurance capabilities at its Dekalb and Barton facilities located in St. Louis. The certification extends Sigma-Aldrich’s ability to manufacture and offer critical raw materials, such as enzymes, proteins and antibodies used in diagnostic assays, and supplies in vitro […]
  • Prescribing the right power supply: Important considerations for using batteries to power medical devices
    Sol Jacobs, VP and General Manager, Tadiran Batteries Medical technology is advancing rapidly, requiring increasingly sophisticated power management solutions, especially when then the device needs to be self-powered. Battery-powered medical devices encompass a wide range of applications, including surgical drills, power tools, automatic external defibrillators (AEDs), infusion pumps, bone growth stimulators and other wearable devices, […]
  • Qosina announces the launch of its e-commerce website
    Qosina is pleased to announce the launch of its e-commerce website, making it easier to purchase thousands of medical device components from stock inventory. Visitors coming to the new Qosina.com will discover a new look and feel and improvements with every click including: · Easy navigation: A new category structure that mirrors the print catalog […]
  • Athermal laser machining for medical implants is the topic of Norman Noble’s latest whitepaper
    Thermal lasers have achieved extraordinary results in microprecision manufacturing of medical implants and devices the past 20 years. Devices we take for granted today, such as vascular stents, could not be produced without the technology; however, there are still significant limitations on what medical implant and device manufactures can produce using thermal lasers. One major issue […]
  • Sealevel announces the SeaISO family of USB isolators
    Sealevel announces the SeaISO family of USB isolators with 4 kV of medical-grade optical isolation between the host computer and connected USB equipment. SeaISO USB isolators are UL Recognized, in accordance with EN60601-1 3rd Edition, and protect both the power and data lines of connected USB devices from harmful ground loops, damaging transients and surges […]
  • The 21st Century Cures Discussion document recently released to the public
    It has been reported that among the 10,000 known diseases, 7,000 of which are considered rare, there are treatments for only 500. According to Dr. Francis Collins, Director of the National Institutes of Health (NIH), it now takes “around 14 years and $2 billion or more” to develop a new drug and “more than 95% […]

Leave a Reply